$195M flows in late rush

More than $195 million in prepaid property taxes flowed in to county treasurers across Colorado in the waning days of 2017 as taxpayers rushed to duck a new cap on deductions included in the recently passed Republican tax bill.

And that number is expected to rise significantly as the tallying continues.

“It was definitely the busiest we’ve ever been. Even more so than tax deadline day,” said Adams County Treasurer Brigitte Grimm, whose staff collected nearly $9 million from about 1,900 properties. “Normally the last week of the year it’s crickets. We were actually short-staffed. Nobody was taking breaks. Nobody was taking lunches.”

The rush to prepay — spurred in part by media reports about a $10,000 cap on state and local tax deductions that the federal government will begin enforcing this year and advice from financial advisers on how best to cash in before that new rule sets in — has now waned.

Colorado treasurers’ offices this week reported they are now

going about the standard early January work of processing tax rolls passed along by county assessors and preparing to mail official property tax bills.

Those officials are also taking stock of what the rush of payments will mean to taxpayers and state governments.

“If I was a tax lawyer, I would be licking my chops,” Boulder County Treasurer Paul Weissmann said of the flurry of activity that followed President Donald Trump signing the next tax bill into law Dec. 22. “(We) were given a little under two weeks to manage something that has never had to occur. I would say all of us were — I don’t want to say making it up as we go, but we were making it up as we go.”

Boulder County saw more than 3,844 tax accounts pay estimates of their 2017 bill over four days last week. That tossed $32.8 million into county coffers. Weissmann said he and his staff are also counting checks postmarked by Dec. 31. He expects that early payment total to rise by an additional $8 million to $12 million before the accounting is done. Last year’s early payment total for the county was $9.6 million.

The question is whether the IRS will allow taxpayers to write off those early payments on their 2017 returns. As crowds of checkbook armed taxpayers filled government office lobbies across the country last week, the agency issued a statement indicating those people could write off payments made only in 2017 if their property taxes were officially assessed before the end of the year.

The directive is confusing in Colorado in particular, because taxes are collected in arrears, meaning taxes for 2017 were assessed throughout the year before official bills are tabulated and sent to property owners in the next few weeks.

“State or local law determines whether and when a property tax is assessed, which is generally when the taxpayer becomes liable for the property tax imposed,” the IRS’s statement reads.

Weissmann said he is confident in the math he and his staff did in providing taxpayers with estimated bills. He said he browsed the tax bill over the weekend and didn’t see any language strictly forbidding early property tax payments.

“That is for a tax lawyer to get rich on if they want to,” Weissmann said of IRS question. “I don’t think anyone sues us unless it’s (Speaker of the House) Paul Ryan.”

If federal action is taken, it would affect taxpayers across Colorado. At least 39 of the state’s 64 counties reported significant early payment activity, with more than 36,000 tax accounts choosing to pay in 2017.

As of the close of business on Dec. 29, the Denver Treasury Division had received tax prepayments for 2,413 parcels totaling just under $20 million. That is before counting mailed-in payments.

By comparison, property tax prepayments for 2016 totaled $5.8 million.

In Pitkin County, which includes the plentiful stock of multimillion-dollar homes in Aspen and Snowmass, Treasurer Tom Oken said 1,040 properties accounted for $12.5 million in prepayments.

He cautioned that the number is just what has been tallied “so far.”

The nearby vacation haven of Eagle County saw $17.3 million from about 2,500 accounts.

It doesn’t appear getting the funds early will have any large-scale impact.

“I suppose it will help for the underlying authorities,” said Grimm, the Adams County treasurer. “They will get a payment, a larger payment, earlier. They will get a distribution on Feb. 10 instead of March 10.”

Populous Front Range counties, naturally, saw some of the larger prepayment tallies. Arapahoe County officials collected $23.7 million, while southern neighbor Douglas County netted $15.4 million. El Paso County saw $12.6 million roll in before the New Year’s Day. Weld County officials, where half of local property taxes are paid by oil and gas companies, collected $2.9 million, none of it from drillers.

About $12.9 million, or 2 percent of Larimer County’s total estimated 2017 property tax collections, rolled in early, said treasurer Irene Josey , who is president of the Colorado County Treasurers’ and Public Trustees’ Association. She and other staff came in over the holiday weekend to tabulate payments that were mailed to the office.

“We want to be available for what the taxpayers need us to do, and that’s why we worked the extra hours this weekend,” she said.

Jefferson County officials didn’t have a final total on early payments as of Wednesday afternoon, but Deputy Treasurer David Villano said it was at least $15 million coming from 5,000 accounts.

“I’ve been here 23 years, and usually we get maybe 1,000 prepayments,” he said.

Despite the ruckus, Villano said he can’t foresee another confluence of circumstances that would lead to a similar rush in future years.

“This was the 100-year flood,” he said. “You’re not going to see this ever again, probably.”